At the IIS Global Insurance Forum in New York, spoke with Stephen O’Hearn, PwC’s Global Insurance Leader (as of July 2015), about the significant impact “disruptors” are having on the insurance business model.

Mr. O’Hearn referenced a recent PwC survey of 1,200 CEOs, which singled out insurance as the industry undergoing the most upheaval. The survey identified a number of reasons, from new entrants and increased regulation, to customer expectation and core systems. Mr. O’Hearn pointed out that “the insurance industry was at the high end of the spectrum for each of those categories.”

In 2010, PwC assessed the market and predicted where the industry would be in 2020. Mr. O’Hearn said PwC recently refreshed those forecasts. While the direction has stayed the same, “the pace of change has far exceeded earlier projections.”   Mr. O’Hearn said “customers expect insurers to act like retailers: on line in real time… multi-channel accessibility.” Digitization should enable customer profiles; products tailored based on need, and a facilitated claims process using wearable technologies, like Google Glasses. Data Analytics should allow insurers to refine their underwriting process and become more proactive…not just a claims payer but a “Risk Advisor.”

Mr. O’Hearn warns insurers about unintended consequences of data analytics. The process can become so refined that people who need insurance can’t get it. This could possibly lead to over regulation, which 91% of the CEOs saw as a threat. “A balance needs to be struck so consumers can access insurance, while allowing the industry to compete.”

Mr. O’Hearn believes that the disruption that is impacting the industry (technological change, customer expectations, and digitization) has the ability to attract millennials.   Meanwhile, Mr. O’Hearn said that the industry needs to be more committed to elevating women into meaningful positions and create an environment where women thrive.

According to Mr. O’Hearn, the major opportunity in the developed world is around seniors. The number of people over 60 years old is going to double between 2010 and 2030, and there are many opportunities for those who cater to their needs. For the developing world, Mr. O’Hearn sees Southeast Asia, Latin America and Africa offering the most opportunity. In Africa, for instance, he believes the insurance distribution channel will be impacted by the sales of insurance through cell phones.

For more of our coverage of the 2015 Global Insurance Forum, visit the On Demand Library.

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